Standing Committee B

[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 10 - Available amount

Amendment proposed [this day]: No. 32, in page 5, line 30, leave out paragraph (b) and insert— 
`(b) to pay any sum which is a lawful and bone fide debt.'.—[Mr. Grieve.]
 Question again proposed, That the amendment be made.

John McWilliam: I remind the Committee that with this it will be convenient to take amendment No. 75, in page 5, line 33, leave out subsection (3).

George Foulkes: Before the break, one of my colleagues was saying that my responses to Opposition Members may be too kind and generous. I was pointing out that the amendment, like most of the Conservative party's amendments, would weaken the Bill's powers to deal with those who have gained proceeds through criminal action. It would make it more difficult for such proceeds to be recovered, and I find that astonishing.
Mr. Dominic Grieve (Beaconsfield) rose—

John McWilliam: Order. Before I call the hon. Gentleman to speak, I wish to say that gentlemen may remove their jackets. Those who have done so already without permission had better consider putting them on again.

Dominic Grieve: The Minister's remarks surprise me. Our job is to scrutinise the Bill. If there are areas in it that need to be strengthened, we shall suggest ways in which that can be done. It is difficult to see areas in which the Bill could be strengthened, as I think is the Government's intention. Indeed, if we were to embark on such a strategy, we might end up with a regime such as that run by Mola Omar. We are heading gently in that direction as it is. If legitimate areas require strengthening for the purpose of ensuring justice, we shall table the appropriate amendments.

George Foulkes: We have not seen any yet. Issues can be probed just as well by proposing to make matters harder for criminals as they can by proposing to make matters easier for them. Yet again and again, time after time, amendment after amendment, all we get from the Tories, who profess to be hard on criminals and to want to confiscate the proceeds of crime, is, ``Oh, no. Let's make it a bit easier. Let's find exceptions. Let's find ways round it. Let's give them loopholes.''

Nick Hawkins: We all understand the party political knockabout in which the Minister is now indulging. However, he has chosen to make such comments about absolutely the wrong clause. Even the hon. Member for Glasgow, Pollok (Mr. Davidson) understood that amendment No. 32, of all those that we have discussed, has the least to do with happens to the defendant. Until the Minister spoke, I thought that the Committee had accepted that the amendment was about innocent people who might be unfortunate enough to have dealings with those who are the subject of the Bill. The Minister is on the wrong track.

George Foulkes: Aha. I am about to prove the hon. Gentleman wrong. Nothing could be further from the truth. Genuine worries have been expressed about debtors, especially by Liberal Democrat Committee members.

Nick Hawkins: All of us have expressed concern.

George Foulkes: Perhaps Conservatives have expressed concern, too. The amendment would substantially undermine the Bill's provisions.

Mark Field: The Minister believes that Opposition Members are being awkward or soft on criminals, but we are scrutinising the provisions. Such matters will receive the same scrutiny—if not more—from solicitors and barristers when they go to court. There must be a sense of justice. We are discussing the payment of a lawful and bona fide debt. We do not want innocent third parties to suffer three, four or five transactions down the line. It would be wrong to have a draconian rule against those individuals. I am sure that Labour Members understand our position. There should not be a new law in that regard.

George Foulkes: I understand the hon. Gentleman's position. Barristers, advocates and lawyers can make their own case and speak powerfully for themselves. People in another place will, no doubt, have vested interests. Our vested interest is on behalf of people who are suffering because of drug dealers, money launderers, criminals, and their activities. That is why we want the Bill to be as powerful and effective as possible.
 As hon. Members have said, only preferential debts, which are included in section 386 of the Insolvency Act 1986, are discounted from ``the available amount''. Those debts are mostly debts to the state, such as outstanding tax debts, but they also include outstanding remuneration of employees, which will satisfy the hon. Member for Lewes (Norman Baker). The Bill protects the same list of creditors that are protected in bankruptcy proceedings. It seemed to our draftsmen that it was right to use those provisions, and not, as the hon. Member for Beaconsfield (Mr. Grieve) said, because the rationale is exactly the same. The provisions seem to be appropriate and to have the right sort of pedigree and purpose.

Nick Hawkins: I hope that the Minister will consider a serious point with those who advise him, even if he cannot accept it today. There is a difference between a trader who deals with a company that might be at risk of bankruptcy and a legitimate small trader. The trader can protect himself by all sorts of means such as credit checks, whereas it is impossible for the legitimate small trader to find out in advance that the person with whom he is dealing, who is apparently a pillar of society—to use the words of the hon. Member for Glasgow, Pollok—may later turn out to be a criminal. That is wholly different to bankruptcy, and that is why my hon. Friend the Member for Beaconsfield, the hon. Member for Lewes and I are making this point.

George Foulkes: Credit checks are not 100 per cent. accurate, and nor is an assessment of criminals with a criminal lifestyle. If one considered the Kray twins, one might gradually have come to the conclusion that they might just be involved in a wee bit of work that was not absolutely legal.

Norman Baker: One might have reached that conclusion with the Kray brothers, but I hope that, as a result of the Bill, people who have hitherto been regarded as respectable pillars of society will be identified and that the proceeds of their crime will be taken away. Individual small traders who deal with them are also regarded as respectable. We do not want to weaken the Bill, but we want to ensure that no further innocent victims are created.

George Foulkes: I had better go on, because some of those questions will be answered during the discussions.
 Other third party interests also receive protection elsewhere in the Bill. Persons with secured interests will be able to recover them. A typical example is a person with an outstanding mortgage. In such a case, it would be open to the mortgage company to apply for a variation or a discharge of a restraint order under clause 43(3) to recover his debt. There is also provision for such interests to be taken into account if a receiver is appointed and at the realisation stage of a confiscation order. 
 Secured creditors are also protected under the legislation by the legislative steer in clause 69(3)(a), which states that the powers of the court and receivers 
``must be exercised with a view to allowing a person other than the defendant or the recipient of a tainted gift to retain or recover the value of any interest held by him''. 
The only issue is whether unsecured creditors should take priority over the settlement of the confiscation order. We believe that they should not. If all debts were given priority over confiscation, there would be two undesirable consequences. First, defendants could acquire services on credit to defeat the confiscation process. That would mean that the available amount was reduced and the court would have to make a lower confiscation order against the defendants than would otherwise be possible, which would be a very effective means of evading confiscation. The kind of people that we are talking about would make such arrangements deliberately to evade confiscation. 
Mr. Grieve rose—
The Chairman Order. Before I call the hon. Gentleman, I point out that if hon. Members want a clause stand part debate, interventions may count as part of it. The interventions thus far have been on the principle of the clause rather than a specific amendment.

Dominic Grieve: I understand what the Minister said and I appreciate that that is a potential problem but drafting surely would not go a long way towards curing that problem. I have two points to make. First, would it be possible to set a date within or outside of which the debts would not be given preferential treatment, thereby preventing defendants from using the situation when they knew that proceedings were to be brought against them? That seems perfectly practical. Secondly, I do not accept the Minister's point—I hope that he will respond to this—that debts from the unsecured creditor, such as the shopkeeper who provides credit, could be used by defendants in the way he suggests. Those categories can be identified.

George Foulkes: I will come to specific categories in a moment. It worries me that the hon. Gentleman is again arguing the criminal's case.

Dominic Grieve: No.

George Foulkes: Well, he is, because the criminals we are talking about employ not only competent solicitors and advocates such as the hon. Member for Surrey Heath (Mr. Hawkins), but competent accounts. The more loopholes that we provide, the more those accountants will say, ``Look, if you acquire services on credit in such a way, you can reduce your allowable amount effectively to evade having to pay.''

Dominic Grieve: I think that the Minister may have misunderstood. That problem can be met by drafting, not simply by the amendment. I am talking not about reducing the amount that one has to pay the state in order to pay a defendant's creditors but about the state taking it upon itself to reimburse bona fide creditors when it has recuperated cash.

George Foulkes: I will come to some of the problems. I am saying merely that we are talking about the available amount. Anything that enables the criminal or those acting on his behalf to find ways of reducing that amount would undermine the Bill. It might be possible to prevent that by excluding from protection debts acquired after the commencement of criminal proceedings but that would not assist in cases in which the defendant had earlier begun evasive action—as he would—after becoming aware that he was under investigation. As soon as a defendant was under investigation, he would start salting away some of his money to ensure that the available amounts would be reduced.

Nick Hawkins: The Minister must understand that the amendment is not designed to enable any drug dealer to salt away anything. As my hon. Friend the Member for Beaconsfield said, we want all the defendant's assets to be seized, but not at the expense of the entirely innocent third parties. There must be a way to do that.

George Foulkes: I shall come to some of those points in a moment. As the Chairman said, we are having a clause stand part debate and covering points that are not directly relevant to the amendment.. Defendants would produce a list of phoney creditors, claiming to have prior debt outstanding against them. In reality, those individuals would be the defendant's criminal associates—the hon. Member for Surrey Heath is shaking his head, but that is exactly what happens. Such associates are the so-called straw men whom we already see deployed in attempts to frustrate the operation of legislation on the proceeds of crime. That action would be difficult to prevent and would greatly weaken the confiscation system.

Mark Field: That is arrant nonsense. It is unbelievable that the police, other regulatory authorities or the new, wonderfully powerful Assets Recovery Agency would not have the power to investigate more thoroughly. The reality is that an investigation in which confiscatory powers come into force would be an enormous operation involving the police and the director of the Assets Recovery Agency. Bank accounts of associates and all transactions going back six years would be looked at in great detail. The idea that somehow the amendment would give licence to a handful of people to salt money away into private accounts is nonsense.

George Foulkes: The hon. Gentleman must admit that the amendment would provide an extra opportunity to set up phoney creditors, which would make it much more difficult for the investigating authorities to find information.
 On Second Reading, my right hon. Friend, the Minister for Police, Courts and Drugs touched briefly on the issue of property subject to a restraint order. He indicated that such orders could be varied to allow a builder to recover debt, for example. To avoid any doubt, I should explain the position in more detail. The legislative steer in clause 69 has the effect that the confiscation process takes precedence over unsecured debts. A restraint order prohibits the payment of any debt, secured or unsecured, without the leave of the court. It can be varied by the court to allow a secured creditor to recover an interest in property but, in the light of the legislative steer, it cannot be varied to allow the payment of an unsecured debt unless that is necessary to maintain the value of the property under restraint. I hope that that clarifies the position outlined on Second Reading.

Nick Hawkins: It is helpful that the Minister has clarified that, but my hon. Friend the Member for Cities of London and Westminster (Mr. Field) and I understood what his colleague said on Second Reading. Our point is that we do not seek to allow conspiracies of straw men that would enable the proper target of the legislation to escape; nothing in our amendment would allow that. As my hon. Friend made clear, the powers in the Bill will stop that happening. We seek a minor change that would protect only the entirely innocent. The amendment would not protect the associates of the defendant.

George Foulkes: What makes me sceptical about the amendment is that the Bill does not change the existing powers, which are sufficiently limited, to confiscate the proceeds of crime. I checked with officials and learned that we have not had any complaints from innocent sufferers; none has been made known to us. Thus, the Opposition's points are hypothetical. Problems have not developed under the existing legislation. Indeed, the Crown Prosecution Service informs us that it happens only rarely that unsecured creditors argue that they should take precedence over the satisfaction of a confiscation order. That reinforces my earlier point.
 The Opposition were worried about the time that would be used in the criminal courts to deal with aspects of the Bill. They asked me to urge a Home Office investigation into how much time would be wasted by the Crown court. How much more time would be taken up if the amendment were accepted? We would have to develop a hierarchy of creditors and decide which should be dealt with first. That would take a huge amount of time and would be a huge administrative burden on the Crown court. 
 As I explained, the Government regard the amendment as wrong in both principle and practice. In the light of my comments—I think that I have been very persuasive—I hope that the hon. Member for Beaconsfield sees fit to withdraw his amendment.

Norman Baker: I do not know what the Minister had to eat, but he has come back from lunch somewhat energised.
 The Minister tried to address the issues, and I give him credit for that. I am the first to admit that there is a concern that, if we build exceptions and safeguards into the legislation, we run the risk of weakening it. That is a fact, but safeguards are sometimes necessary. The most efficient method would be to lock up everyone in sight, so that we are bound to catch all the criminals. You would catch lots of innocent people as well, so you have to have a system for differentiating between those whom you want to catch and those who are innocent.

John McWilliam: Order. That is a ``you'' too far. The hon. Gentleman knows that if he uses the word ``you'', he refers to me. I do none of those things.

Norman Baker: I take your word that you do none of those things, Mr. McWilliam.

John McWilliam: The rules are very strict. The use of the word ``you'' refers to the Chair.

Norman Baker: Forgive me for doing that, but I speak as a former English teacher. The word ``you'' is used as a modern equivalent of ``one'', and that was the sense in which I was using it.

John McWilliam: Whoever said that this was a modern assembly?

Norman Baker: Its members are jacketless, I must agree.
 There is genuine concern that the legislation might be weakened by safeguards, but, equally, I hope that both sides of the House share the determination not to introduce legislation that sweeps up in its wake innocent third parties. The legislation is generally good, and I hope that it leads to many people being caught who have got away with crime for a long time and may be in powerful positions. I welcome that, and I look forward to reading in the newspapers that so-and-so, who has been a respectable person in society, has been caught.

Bob Ainsworth: Does the hon. Gentleman accept that a principle is involved? Confiscation will be part of the sentencing process far more extensively under the powers. Do we compensate creditors when we lock someone up and their business goes bust? We do not. Do we compensate people when we fine them and their business goes broke? Why do we not compensate the creditors if they flee abroad from the jurisdiction because the forces of law and order are after them? Does the hon. Gentleman accept that a serious principle would be at stake were we to become involved in compensating the creditors of criminals, effectively, accepting responsibility for the debts of criminals? That is what the amendment would do—confiscate both the proceeds and debts of crime.

Norman Baker: The Minister talks about compensation. We are talking about a sum of money—the ``available amount'', to use the term in the Bill—that would have already been taken by the authorities. This is not a question of compensation from the Treasury, but of how we deploy the money that is seized. We are asking what constitutes free property and what constitutes obligations. Those are terms in the Bill.
 I accept that there may be drawbacks to the amendment, but it is well intentioned. Does the Minister recognise that if his legislation is effective in identifying more people who have ill-gotten proceeds of crime, more innocent third parties will be swept up in the process? That will be inadvertent and regrettable, but it will happen. As the Minister is unhappy with the amendment, I suggest a method that would allow the unsecured creditors—such as the ordinary businessmen or women whom we want to protect—to make a claim to a central pot and thereby prove their case. If we are not happy to accept their claims automatically because of the reasons given by the Minister, could a system be set up that at least gave them a chance of proving their case and securing the money owing to them?

Stephen McCabe: I understand the hon. Gentleman's point. However, what is the difference between that proposition and the case of someone who suffers a large fine and argues that he is no longer able to pay his creditors? If such a system is in place for one, surely it should be applied to the other.

Norman Baker: That is a fair point. I picked up the Minister on the word ``compensation'', which I did not agree was an accurate description. However, there is a general public policy problem that goes far beyond clause 10, and I am sure that you will tell me, Mr. McWilliam, if I stray too far. In general terms, if the state takes money from an individual, and the consequence is that an innocent third party suffers, there is a case for that money being deployed, under certain circumstances, for that innocent third party.

Dominic Grieve: Does the hon. Gentleman agree that the logic of the Minister's earlier intervention was that even secured creditors should be ignored for the purposes of the compensation system? If that is the attitude that the Minister wishes to take, there is no logical reason why secured creditors should have an advantage over unsecured creditors. In terms of equity and fairness, no logical distinction exists.

Norman Baker: The Minister will doubtless pick up on that point when he responds.

Nick Hawkins: The Minister's intervention does not undermine the points made by Opposition Members and Labour Members because once the legislation is in operation, the state will have seized all of the assets concerned. As the hon. Member for Lewes rightly said, it is therefore a question of how they are distributed. Will not Labour Members be the first to complain about the far-too-wide scope of the Bill if they are besieged in their surgeries by constituents saying, ``Why should Gordon Brown keep all this money when my business is going bust and I am entirely innocent?''

Norman Baker: It will be difficult for any Member of Parliament to deal with a situation in which an innocent third party, who was a law-abiding citizen going about his or her business and working hard, was suddenly put out of business or suffered a calamitous consequence because of something that had nothing to do with them.

Ian Davidson: To clarify, does the hon. Gentleman accept that it is not intended that the money will be retained by Gordon Brown, but that it will be recycled and spent in constituencies such as mine? As I suggested that very thing on Second Reading, I hope that it will be spent in my constituency first. It is a question of whether the money should be kept for the benefit of the criminal, or spent for the benefit of the poor people of my area.

Norman Baker: Gordon Brown is used as a synonym for Government. He will doubtless be a channel through which funds will flow from criminals. He will be a kind of accessory after the fact—receiving money from criminals and distributing it widely like a latter-day Robin Hood to constituencies such as Glasgow, Pollok and, indeed, Lewes, which has been hit terribly by floods, and should receive money from the Government, which has not happened so far.
 Irrespective of that, innocent third parties will suffer as a consequence of this legislation. The more effective the legislation is at catching people, the more innocent third parties who will suffer. The Government have a duty to recognise that, and to find a formulation that protects those third parties as far as possible. The amendment, which the Minister does not like, would at least allow such people to appeal to a central fund. There may be other ways forward. However, the Minister has a responsibility not only to catch those who have ill-gotten proceeds of crime, which we all support, but to help those who are affected unintentionally.

Ian Davidson: The hon. Member for Lewes said that Gordon Brown was to be used as a synonym for Government. That is not universally accepted—

John McWilliam: Order. I let the hon. Member for Lewes get away with it because he is new, but the hon. Member for Glasgow, Pollok must know that Members are referred to by constituency.

Ian Davidson: I was merely using the term that the hon. Member for Lewes used to describe the Chancellor—and that synonym is not accepted even on the street where Gordon Brown lives.
 I turn to the question of how the matter will be dealt with in practice. A practical difficulty is involved, but having listened to Opposition Members, I do not believe that they have been willing to take it on board. Drug dealers, in particular, deal overwhelmingly in cash and will have already hidden whatever can be hidden. If they are aware that they are the subject of an investigation, they have every incentive not to pay a bill in any circumstances, as they know that all their assets may be gathered up by the Government for compensation. If the electricity, gas, council tax, joiner's, butcher's and candlestick maker's bill will all be met from the same amount, they have no incentive not to spend wildly. Indeed, they have a positive incentive to spend wildly, because if they believe that they are the subject of an investigation that is likely to find them guilty—they will know what evidence is likely to be available—they will be best advised to have a good time before they go away for several years. In such circumstances, the Government would effectively be subsidising their extravagance in the period leading up to their conviction. A moral hazard is involved that it would be inappropriate for us to accept. 
 I accept that a problem is involved. Are there any mechanisms in the Bill, or has the Minister thought of any, whereby a more speedy alteration to the legal position might be introduced in the event of a problem? Every year, the Chancellor introduces in the Budget legislation that changes various measures. I am not sure whether any of the Bill's financial provisions could be dealt with in that way. We need to be able to close loopholes and fine-tune without having to go through the procedure involved in introducing a revisionary Bill.

Dominic Grieve: Committee stages of Bills are strange. I tabled what was designed as a probing amendment not because I had received briefing material from a pressure group or outside organisation but because, reading through the clause, I was struck by how considerable—I have rather overused the word ``draconian'' and will avoid it—or heavy the consequences could be in certain circumstances for innocent third parties. I tabled the amendment not because I was interested to find out whether it would completely fit the Bill—I accept that it probably does not, and I listened carefully to the Minister's argument that practical issues are likely to be involved.
 I was slightly surprised at Ministers' reaction. The amendment was, if ever an amendment was, designed to explore an aspect that I consider to be neutral in its impact on the operation of the Bill. It seems to have attracted a level of opprobrium and a knee-jerk reaction from the Government that I find surprising. It is almost as though it stung them in some way. 
 The hon. Member for Glasgow, Pollok, who has given some thought to our suggestion, made a point about criminals spending wildly if they believe that their assets will be seized. As the Bill stands, I am sure that criminals will spend wildly before their assets are seized. A feature of the matter is that we cannot make criminals who spend wildly prior to the seizure of their assets magic back the money that has gone. They operate a cash economy and if they decide to go out to have expensive restaurant meals in the last week before the guillotine comes down on them—

Ian Davidson: That is a new proposal.

Dominic Grieve: I thought that the proposal would commend itself to the hon. Gentleman. There was a tradition of decapitation using machinery in Scotland up to the 18th century, which we did not have down here. Perhaps the hon. Gentleman was thinking of that.

John McWilliam: Order. The Minister of State and I took our magistrates oath together. We are well aware of who Baillie Deacon Brodie was.

Dominic Grieve: Thank you, Mr. McWilliam.
 I understand that a criminal might try to spend money and could develop an artificial line of credit through which he could subsequently recoup it. I fully accept what the Minister said about the deviousness of the criminal fraternity, their use of accountants and the wonderful explanations that are given for money that they possess. I remember a criminal case in which we discovered £25,000 in banknotes in a cupboard, and the defendant produced a person in court to say that he owned the money and that the defendant was looking after it. I am alive to all that. However, it is possible, without excessive bureaucracy, for bona fide creditors to be identified and to show that they provided a service or goods. There would be overwhelming evidence—probably documentary—that that occurred, and witnesses to back that up. Such creditors would appear to be members of the community of proper standing rather than members of the criminal fraternity. They would find themselves out of pocket and their businesses seriously endangered even though they had provided the credit. They would watch while the money was removed and put into the state's hands. 
 The point was made that that happens under the regime of fines.

Bob Ainsworth: Or confiscation.

Dominic Grieve: Yes, but we are creating a completely new regime.

Bob Ainsworth: No.

Dominic Grieve: Well, we are, because the regime goes wider than the old regime and, above all, through assumptions, targets assets that are not necessarily directly related to the offences for which a person is convicted. It bears no relation at all to fines or criminal sanctions. One of our most interesting discussions concerned whether the regime is criminal or civil.

Stephen Hesford: The hon. Gentleman seems to make a novel point of criminal law. If the available amount comes identifiably from the process of seizing a criminal's assets—drug money and the like—he seems to suggest that however unfortunate third parties may have encountered the former owner of the money, criminal money should, via the state, be returned and circulated to the so-called innocent third party, rather than confiscated. However, the money remains drug money.

John McWilliam: May I give a yellow card here? I am seriously considering my position about the clause stand part debate because this debate has been extremely wide.

Dominic Grieve: I accept that we have developed something like a clause stand part debate, Mr. McWilliam, but that followed logically because we were discussing the nub of the matter. I certainly shall not press for another such debate on the clause, although I cannot, of course, speak for other hon. Members.
 I admit to the hon. Gentleman that we are talking about a grey area. As I understand the nature of the confiscation proceedings, and because we reverse the burden of proof, I find it philosophically difficult to say that we are considering money that can be distinctly related to or identified with a particular criminal activity. The whole reason for creating such a wide scope is to target criminals' assets in general. Indeed, clause 6 refers to ``general criminal conduct'', which is a widely defined expression. That is why I think that we are moving into slightly uncharted territory, which I simply want to make as sensible as possible. I do not want to prevent that from happening. Indeed, I have never tabled an amendment to that effect. My party has always been in favour of the change, as I have. I am not just acting as a spokesman who does not believe in the party's point of view. 
 However, these are extensive powers. I cannot predict how things will work out in practice, but if the Government's intention is what I think it is, there are likely to be numerous proceedings, and large quantities of assets will be seized. In those circumstances, it is possible that a far wider category of innocent third parties will be hauled in and adversely affected by the procedures than hitherto. 
 What started 15 years ago as a very limited procedure may now be reaching its final expression as a very wide procedure. It is almost—I do not mean this critically—a form of parallel law enforcement. Picking up on what the hon. Member for Glasgow, Pollok said, we are saying to people, ``We can't get you on specific offences, but we can identify you. You've done all sorts of things that make you fall within the categories and you must justify your postion.'' When people cannot justify their position, away goes their money. 
 If the legislation works, large quantities of assets will go. I rejoice at that, but I am also concerned about the seemingly inevitable knock-on consequence that a far greater range of innocent third parties may be adversely affected. I have a simple philosophical question in those circumstances: should the state have priority or perhaps start thinking about having greater regard for the hardship that may be experienced by those third parties? 
 The Minister will accept that we are not talking about bankruptcy proceedings, in which there is inevitably insufficient money to meet the liabilities of the person concerned, so the unsecured creditors are bound to experience hardship, and things must be shared between them. 
 We are talking about a situation in which there may be ample assets, but they have gone into the hands of the state. I am sure that the state will have various good uses for them, but whether they will ever go to help the constituents of the hon. Member for Glasgow, Pollok, I do not know. It is a rather funny system that says that money will be distributed for public works of some description in his constituency, while at the same time all the local shopkeepers have gone out of business and no one is in a position to open new businesses there. Running a local business, particularly in areas with serious crime problems, is a hugely problematic undertaking. My experience relates only to central London, but I suspect that the situation is the same in his constituency. 
 I rather expected the Minister to stand up and say sympathetically, ``I understand what you're saying, and we might think about these problems, although I do not think that there is an easy solution.'' I would then have sat down happily, but the Government's response is disappointing.

Stephen Hesford: If the hon. Gentleman does not mind my saying so, he is wriggling. The amendment applies to a person convicted of a specific crime, as well as to anyone roped in because of a criminal lifestyle. If it were made, you would have drug money back on the street because of an innocent third party. Is that what he is arguing?

John McWilliam: Order. I will not have any drug money on any street. I felt a slight anticipation of the debate on clause 11, too, but never mind.

Dominic Grieve: The hon. Gentleman agreed that the Bill is not a replica of previous legislation. We want to widen the categories of people from whom assets may be confiscated. I accept that confiscation took place previously and that such a regime operated. I also accept that the Minister knows of no serious complaints. That is reassuring, but we are widening the scope—

Nick Hawkins: The Minister mentioned the Government's lack of complaints. Does my hon. Friend agree that if an innocent business man were to apply to protect the debt owed to him, solicitors would advise him not to bother because no statutory power exists? The amendments propose a wider regime to protect the innocent.

Dominic Grieve: I agree. I was not in Parliament when the 1985 legislation was debated but I have seen how it works in practice. As a matter of philosophical principle and leaving practical problems to one side, there would have been good grounds in 1985 to argue along the lines that I have today, because this is not an ordinary bankruptcy regime. Unlike in bankruptcy, the state requires substantial sums, so bona fide third parties adversely affected as creditors should be considered. How best to do that raises practical problems and I am mindful of what the Minister said, although I am not persuaded that the system will prevent injustice. Furthermore, bogus applications should be rapidly dismissed.
 I must tell the hon. Member for Wirral, West (Stephen Hesford) that I have not been involved in restraint proceedings. When I was a barrister, my job was to obtain the original confiscation order, but I never dealt with its civil consequences in the High Court. Nor did I deal with practical problems or people adversely affected. 
 The amendment was a probing one, but I am minded to press it to a Division because the Minister is unprepared even to think about it. Unless he does—and I do not think that he will—I will press it to a vote. I do not expect to win, but I want to mark it up as an issue that may be taken up elsewhere. It may even be taken up in a private Member's Bill. There is a point here that the Committee can sensibly address without detracting from the force of what the Bill intends to do. We support that intention.

George Foulkes: I genuinely thought that I provided convincing arguments. Obviously I did not. I will have another go and try to encourage the hon. Gentleman to withdraw the amendment. All we are talking about is what should be discounted in the calculation of the available amount. Some of what he implied went far beyond that. He said that he found my reply disappointing. We must remember that we are talking about serious matters that affect our constituents. We are not trying to score debating points, although I agree with my hon. Friend the Member for Wirral, West that the Opposition spokesman appeared to be pulling back and conceding some points. I do not blame him for that.

Dominic Grieve: We are at the Committee stage.

George Foulkes: That is a perfectly valid thing to do during the Committee stage. The hon. Member for Lewes said that this was a well-intentioned amendment. I do not doubt that, but I hope that he also realises that it would seriously weaken the powers of the Bill. The principal purpose of the Bill is to deter criminals by having real powers to confiscate their assets. That bears repetition.

Norman Baker: I accept that that is the Minister's view of the amendment. I hope that he will go on to say what alternative method he proposes to help innocent third parties.

George Foulkes: I shall come to that. Let us talk about the poor creditors, the innocent third parties and the unsecured lenders. The hon. Member for Beaconsfield asked about secured lenders. If he wanted it to be just a probing amendment he could have tabled an amendment to say that the secured lenders might not be taken into account either. That would have hardened the arrangement. We would then have seen that all his amendments did not tend in the one direction of weakening the power of the Bill.
 Inevitably, an unsecured lender will expose himself or herself to a wide range of risks. The fact that the borrower may be subject to a confiscation order is only one of those risks. The borrower or recipient of goods and services may turn out to be insolvent. He or she may die without leaving an adequate estate or may simply default or, as my hon. Friend the Under-Secretary rightly pointed out, be sent to prison. All of those pose risks for unsecured lenders. This is just one of many risks that we are talking about today.

Nick Hawkins: Of course what the Minister is saying is right. Those who are in business understand some of the risks relating to bankruptcy. Those in substantial businesses often run credit checks. The Minister forgets that he and his hon. Friend the Under-Secretary conceded that this is a much wider regime. A much wider range of people might be accidentally hit. These are people who could have no way of protecting themselves. Surely he does not suggest that the local greengrocer, to take the original example from my hon. Friend the Member for Beaconsfield, should try to secure his position. Greengrocers do not deal in securing their credit.

George Foulkes: The hon. Gentleman said earlier that we would be besieged at our surgeries by these greengrocers with unsecured debt problems—[Interruption.] No doubt they will be throwing things at us. We have checked to see whether that is happening. We have the confiscation arrangement. It covers drug dealers. We are extending it to include other criminals such as money launderers. Let me put it to the Committee, has anyone been besieged at their surgeries by people saying, ``I have lost money that is owed to me by these drug dealers.''? No one is rising.

Nick Hawkins: Like other hon. Members, I have spoken to many small traders at my surgery. They tell us that they have lost money, had their businesses put at risk and, in some cases, been put into bankruptcy because of a range of issues. As I said earlier, if a small business man were to take professional advice under the current regime about whether he had a chance of pursuing a claim, he would be told not even to try it. He would be told that there are no powers whereby such action can be taken. With such a huge extension to the regime, Parliament should provide protection for the innocent. That is what it is for.

George Foulkes: I am grateful to the hon. Gentleman, because he has strengthened my argument. I said that an unsecured lender would inevitably expose himself or herself to a wide range of risks. He has confirmed that.
 There are other innocent victims. As my hon. Friend the Member for Glasgow, Pollok said, one of the reasons for confiscating the money is to deter people from crime and ensure that people do not profit from the proceeds of crime. It is also designed to recycle some of the money to help those who have suffered because of the actions of criminals. My hon. Friend mentioned that on Second Reading, but I mean him no disrespect when I say that such provisions are already in the Bill. 
 It is explicit in the Bill that some of the money must be used to help people who are suffering, those who need drug treatment and those who have been devastated by the actions of drug dealers. I know about such matters because of what happens in my constituency. The hon. Member for Lewes has told us about the appalling effect that drug dealers have on his constituency. Surely it is right that we should use as much money as possible to sort out some of the damage that drug dealers have wreaked on our communities. I hope that the hon. Gentleman will agree.

Norman Baker: That aim is entirely laudable. It is not only drug dealers who have an unwanted effect on constituencies, but others who are involved in serious crime. No one would disagree with that idea. However, some of those who are suffering because of drug dealers have unsecured debts, and they will be out of pocket under the Bill.

George Foulkes: I think that I have already dealt with that matter. There is a fairly representative cross-section of hon. Members in the Committee, yet no one jumped up to say that he or she is already besieged by greengrocers, for example, as claimed by the hon. Member for Surrey Heath. I say to the hon. Member for Lewes—perhaps on some occasions I should call him my hon. Friend—that if the amendment were accepted, who can guarantee that the defendant, or the criminal, would use the money to pay his unsecured creditors? Surely such people will not say, ``Oh well, the court has been kind. It has taken account of things. There you are, Mr. Greengrocer.'' That will not happen.

Dominic Grieve: I hope that I made it clear that two key factors are involved. If the person concerned is left with the assets, the problem will not arise. The second point concerns a person who, through the seizure of the assets, is effectively bankrupted. In such circumstances, surely it is not beyond the wit of the Government to devise a system whereby they, rather than the person involved, take the money and pay the compensation.
 Mr. Foulkes: That is a possibility, but such action would mean a huge new administrative process. It would mean a hierarchy of creditors. 
Mr. Hawkins indicated dissent.

George Foulkes: The hon. Member for Surrey Heath is shaking his head, but earlier he was worried about a simpler matter causing extra administrative problems for the Crown court. The Committee must think about the problems that that would cause. Such a measure would be far more complicated than what the hon. Gentleman was worried about earlier.

Nick Hawkins: At an earlier stage in the debate, the Under-Secretary quoted some of the discussions when the original legislation was being debated in 1986. The Minister asked why such issues were not raised then. I have had the benefit of reading Hansard and of reminding myself of the Second Reading debate in 1986. I direct the Minister to the comments about protecting the innocent made then by Lord Corbett of Castle Vale, who, as the Minister knows, was the Chairman of the Home Affairs Select Committee until the general election. On 21 January 1986 he expressed his worries about the measure's accidental effects on the innocent, as we are doing this afternoon. His speech appears in Hansard in column 246 onwards.

George Foulkes: Since 1986, when my good friend Robin expressed those fears, there has been no evidence of the innocent being affected. That is my key point: it has not happened.
 The hon. Member for Lewes and some Conservatives have pleaded with me to be helpful, flexible and kind. I hope that members of the Committee will agree that we have been. We took account of what was said on Second Reading and we are altering the arrangements for Scotland. We debated the appropriateness of the term ``criminal lifestyle''. Arguments were made and we agreed to have another look: incidentally, no more acceptable or accurate alternative has yet been suggested. We also agreed to re-examine other issues. As on Second Reading, if convincing arguments are advanced, we will consider them. I said so earlier today when we debated clause 7, and I acknowledged that a reference to clauses 15 and 16 might be useful. I therefore repeat that we have been flexible. Indeed, my hard-hearted hon. Friend the Member for Glasgow, Pollok earlier accused me of being Mr. Softy. On this occasion, however, I honestly have not found any of the other side's arguments convincing—though I have found my own arguments very convincing!

Nick Hawkins: You always do.

George Foulkes: And I hope that my hon. Friends do, too. In practical terms, the amendment would have a deleterious effect on the operation of the confiscation laws, while making little contribution to reducing the financial risk, which inevitably forms part of the context within which lenders and service providers must operate. It would undermine the provision substantially. Accordingly, I urge hon. Gentlemen to withdraw the amendment. If they are not willing to do so in the light of our overwhelming arguments, I invite my hon. Friends to vote against it.

Ian Davidson: Before Mr. Softy—sorry, I mean my hon. Friend the Minister—finishes his speech, I would like to ask him about the possibility for amendment if the measure causes difficulty. If we find ourselves besieged by greengrocers, or anyone else, is there a mechanism to amend the provision?

George Foulkes: This Parliament is supreme, and it is always possible to alter legislation through a subsequent Bill. As I understand it, there is no specific provision within the Bill to allow this legislation to be amended. The hon. Member for Beaconsfield invited private Members' legislation on the subject, and further Government legislation is always possible. However, as I said, the Bill has no specific mechanism to provide for automatic review or reconsideration of this issue.

Ian Davidson: In that case may I ask the Minister, who is in an agreeable mood this afternoon, whether he would consider taking this matter away for further consideration? I specifically mentioned it on Second Reading. Since the will of Parliament is liable to be thwarted by lawyers or judges finding loopholes or making laws of their own contrary to our intentions, could we not—perhaps through the Chancellor's annual budget procedure—make minor amendments to alleviate inadvertent difficulties or close those loopholes? I hope that the Minister will be prepared to look further into that possibility.

John McWilliam: Order. This is miles off the amendment, and the clause. The Bill is still proceeding through the House. How it is dealt with in Committee is connected with how it can be dealt with on Report, and it must go to another place that can also consider it. That is the simple answer.

George Foulkes: You are right, Mr. McWilliam; indeed, it is redundant of me to say so. It is always open to my hon. Friend and to Opposition Members to raise further amendments during discussion of the Bill, and for amendments to be considered in another place. However, I urge my hon. Friend to support the clause. It would not be appropriate to support the amendment, which would seriously undermine the provisions. If my hon. Friend wants to pursue his suggestion, there are better and more effective ways of doing so, and at more appropriate times.
 Question put, That the amendment be made:—
The Committee divided: Ayes 5, Noes 13.

Question accordingly negatived.

John McWilliam: As I have already suggested, the principle of the clause has been well exposed by the debate; indeed, some Members were even encroaching on the next clause. Therefore I do not intend to call a stand part debate.
 Clause 10 ordered to stand part of the Bill.

Clause 11 - Assumptions to be made in case of criminal lifestyle

Norman Baker: I beg to move amendment No. 24, in page 5, line 37, leave out `must' and insert `may'.

John McWilliam: With this it will be convenient to take the following amendments: No. 51, in page 5, line 37, leave out
`make the following four assumptions'
 and insert 
`follow the following four criteria'. 
No. 52, in page 5, line 41, leave out `assumption' and insert `criterion'. 
 No. 53, page 6, line 1, leave out `assumption' and insert `criterion'. 
 No. 54, page 6, line 5, leave out `assumption' and insert `criterion'. 
 No. 55, page 6, line 8, leave out `assumption' and insert `criterion'. 
 No. 56, page 6, line 11, leave out `make a required assumption' and insert `follow any such criterion'. 
 No. 57, page 6, line 13, leave out 
`assumption is shown to be incorrect' 
and insert 
`criterion is shown to be inapplicable'. 
No. 58, page 6, line 14, leave out `assumption were made' and insert `criterion were followed'. 
 No. 59, page 6, line 15, leave out from `not' to `it' and insert 
`follow one or more of such criteria'.

Norman Baker: As the hon. Member for Beaconsfield said earlier, it is difficult to predict how Committees will go. I imagined that we might get to clause 11 earlier, but in the event we had a useful discussion on clause 10.
 Clause 11 is one of the most important clauses, along with clauses 6 and 75. The amendment in my name, in those of my colleagues and in those of the Conservatives, raises important issues. Yet again, we have an amendment that would replace ``must'' with ``may'' and would build in some discretion for the judicial process. No doubt the Minister will characterise that as weakening the Bill. That charge can unconsciously be made, but there is always a balance to be struck between ensuring that legislation is effective and attains the aims that the Government wish and that Members of all parties share, and ensuring that sufficient safeguards are in place to prevent miscarriages of justice or inappropriate behaviour that cannot be challenged. The Committee will frequently discuss that key balance. It is dealt with in the amendment, although there are alternative places in the clause—and in the Bill—where it would be possible to build in safeguards.

Mark Lazarowicz: The hon. Gentleman said that the clause allows no discretion to the court, but subsection (6)(b) states that the court is allowed not to make an acquired assumption if
``there would be a serious risk of injustice if the assumption were made.'' 
Does that not offer the court the type of discretion that the hon. Gentleman seeks?

Norman Baker: For the record, I did not say that there was no discretion. I said that a balance needed to be struck.
 That subsection is, in many ways, the nub of the clause, and I will remark on it later. However, I have tabled an amendment to that subsection, which will be considered later on this afternoon, and I do not wish to be ruled out of order by discussing the issue now.

John McWilliam: The amendments are grouped, so hon. Members can be relaxed about such matters. However, amendment No. 26 is in the last group, and we will address the point that has been raised when we discuss that group. The hon. Gentleman is right not to try to persuade other hon. Members into territory that is intended to be discussed in a different debate.

Norman Baker: Thank you, Mr. McWilliam. Sometimes, it is difficult to separate the amendments out.
 There are different ways of securing safeguards—we are discussing them one at a time, but there are other ways. 
 As is stated in the helpful notes that the Minister and his colleagues have provided, clause 11 
``applies where the court has decided that the defendant has a criminal lifestyle and it is, accordingly, considering the defendant's benefit from general criminal conduct.'' 
The clause states that the court assessing the defendant's benefits of crime must make four assumptions unless one of two safeguards—such as they are—apply. The first safeguard is if 
``an assumption is shown to be incorrect''. 
The burden of proof for that lies with the defendant. The second safeguard is if 
``there would be a serious risk of injustice''. 
When the Committee discusses amendment No. 26, I will argue that those are high tests to meet. That is one reason why I have tabled amendment No. 24, which would give flexibility to the judicial process by replacing ``must'' with ``may''. 
 It could be argued that the Bill, in common with the legislation that it replaces, makes it possible to impose confiscation orders on defendants whose levels of criminality differ widely, particularly when the prosecution relies on accusations of criminal conduct or criminal lifestyle. 
 Given the wider nature of the Bill, I wonder whether the Minister and his colleagues have considered whether the requirement of proportionality is likely to be met in all cases that do not involve drug trafficking, and in which there would be a duty to make a confiscation order. It is important that that question is asked in advance, and it is germane to the amendment. That is a wider issue than it was previously, so it is legitimate to ask whether the mechanisms in place are as valid and appropriate for current legislation as they were when they were framed. 
 With regard to assumptions, the inherent danger is that the court might deem it necessary to grant confiscation orders when the evidence might not be sufficient to support that. That might lead to property being confiscated that might have been acquired innocently. 
 I support the intention of clause 11. However, although I understand why it has been framed in the way that it has, and I am open to persuasion that the amendment is not appropriate, I felt that it was important to have a debate on the flexibility that the court has to see whether it strikes the right balance between ensuring that those who are guilty of inappropriately receiving the proceeds of crime are dealt with appropriately and ensuring that those who are innocent are not caught up in the process. Inserting ``may'' instead of ``must'' would give the court the necessary flexibility to consider that more carefully and, in extreme circumstances, show the flexibility that the clause would not allow. I will be interested to hear the Minister's comments.

Nick Hawkins: As the hon. Gentleman rightly said, we on the Conservative Benches wish to associate ourselves with amendment No. 24 and amendments Nos. 51 to 59. I want to expand a little on his comments because serious points have been put to my hon. Friend the Member for Beaconsfield and me by Liberty, which is an organisation that has always had all-party support. Indeed, it has support from several Government Members in the Committee, although not all of them are in the Room this afternoon.
 Before anyone is accused of trying to tear out the heart of the Bill or protect the Mr. Bigs, let me say that Liberty does not want to undermine the legislation, but still has substantial concerns. It believes that the Government have not got the balance right. It provided some helpful international comparisons with the way in which the provisions operate in other jurisdictions. Without wanting to bore Committee members with legal cases, which I know would be dismissed by Government Members as lawyers trying to find loopholes, I want to draw attention to ways in which foreign jurisdictions have been used in the most serious recent cases in our courts. 
 One of Liberty's points is that bad law can lead to greater problems if the courts strain to criticise legislation that Parliament has enacted. That may lead to the exact consequences that worry Government Members such as the hon. Member for Glasgow, Pollok: that the courts' unhappiness about Parliament's drafting will lead to loopholes being created in the courts. He and I share the aim of not wanting the Mr. Bigs to escape, so we must ensure that the law is balanced and proportionate, which is what Ministers have claimed since Second Reading. 
 Lord Woolf, one of our most serious judges, and hardly one of the airy-fairy civil libertarians whom the Home Secretary has recently criticised, referred in a 1993 case to American cases on how the balance should be struck. I will set out what Lord Woolf has said, and I apologise to Committee members for the technicality, as they may not be familiar with the way in which such matters are set out in court. 
 Both Liberty and Lord Woolf are concerned that the application of the statutory assumptions in the Bill would create a mandatory forensic exercise in which there is potentially no rational connection between the facts proved by way of the trigger convictions and the ultimate facts presumed. Various jurisdictions have already considered in other cases what safeguard tests should be applied to determine when it is appropriate for reverse burden assumptions to be permitted. 
 In other words, courts in other countries, which are sometimes the highest courts in those lands, have considered the safeguards that are required to make the law work properly and ensure that civil liberties are not completely trampled over. The test has been expressed in different terms, but the requirements are similar. They are to make the initial application of assumptions by a court devoid of arbitrariness. 
 Lord Woolf discussed a case in the United States that he applied in connection with a case in this country. He said that there was a 
``substantial assurance that the presumed fact is more likely than not to flow from the proved fact on which it is made to depend.'' 
That was the case of Leary v. the United States in 1969. In 1993, Lord Woolf said that that was the minimum safeguard without which it would be difficult to justify a reverse-burden provision. Lord Woolf is one of the most senior judges in the land, and he wants the laws to work and he, like us, wants to ensure that the Mr. Bigs are hit. He regards the phraseology used in the American case as the minimum safeguard. Liberty and the Conservatives are worried because the Government's proposals do not provide even the minimal safeguard that one of our senior judges regards as essential. 
 Liberty has identified many cases in Hong Kong, Italy, South Africa and Canada, but I shall not bore the Committee with those. There is little point in going though those cases in detail, although if the Minister mentions them, I may return to them at a later stage. That is the way in which the matter has been set out to us.

Stephen Hesford: Can the hon. Gentleman refer to any case in British law that has examined the assumptions that have been part of our law for a long time?

Nick Hawkins: Yes. The case that received Lord Woolf's judgment was the case of the Attorney-General of Hong Kong v. Lee Kwong-Kut.

Stephen Hesford: Is Hong Kong British?

Nick Hawkins: The case came to the Privy Council, which, as the hon. Gentleman knows, decides cases that fall for decision by our judges as a matter for our courts. The case was brought to the House of Lords, which is why Lord Woolf heard it.

Stephen Hesford: The hon. Gentleman knows that, strictly speaking, such cases are not part of our law, although they may be cited, and may be persuasive. Can the hon. Gentleman cite a British case that was decided in British courts?

Nick Hawkins: The hon. Gentleman may not understand. Our Judicial Committee of the Privy Council, which consists of our judges, took the decision. The judges are those that sit in the House of Lords and they use our principles of jurisprudence. As a sensible lawyer, the hon. Gentleman is surely not suggesting that when Lord Woolf sits on a case that starts in England, that is authoritative, but if he sits—in this building—on the Judicial Committee of the Privy Council and uses all the principles of English jurisprudence to hear a case that started in Hong Kong before our responsibility there ended, his remarks are not part of English jurisprudence. I know that the hon. Gentleman would not suggest that. The principle is exactly the same: although the case started in Hong Kong, it is English jurisprudence.
 After examining the minimum safeguards to which Lord Woolf referred, Liberty suggested that we needed to replace the word ``assumption'' with the word ``criterion''. Liberty set that out by reference to much case law, which it would not be helpful for me to go through in detail. Again, however, if the Minister refers to it, I may need to respond. This time, however, I hope that when Ministers respond to the amendment sensibly and moderately tabled by the hon. Member for Lewes, which we support, they will not indulge in party political knockabout, and will not accuse us of trying to undermine the principles of the Bill. We should be moving beyond that. We should be looking at serious minimum safeguards. Whether it is the Minister of State, who is proud of not being a lawyer, or the Under-Secretary who responds, I hope that whoever does so will not make the mistake of trying to attack our genuine concerns, which are based on the advice of Lord Woolf.

Mark Lazarowicz: I had hoped to intervene during the hon. Gentleman's speech, and I hope that this point will be dealt with in due course. Does the hon. Gentleman believe that the application of the tests that he suggests, which would replace assumptions by criteria, would have any practical effect on the prospect of a court's reaching a different decision in a practical case? Does he not accept that the tests that he applied are likely to achieve a similar result when applied in an actual case? Rather than making a serious criticism of the line put forward by the Government in the clause, the hon. Gentleman is merely making a debating point.

Dominic Grieve: I had not intended to speak, but I shall do so briefly. The distinction between the approach in the clause and the approach suggested by the hon. Member for Lewes and my hon. Friend the Member for Surrey Heath seems clear. One is mandatory, whereas the other is a series of discretionary provisions, thereby allowing a measure of judicial discretion, when, currently, no such discretion is allowed—we have had this debate previously. That ties in, to an extent, with the different regime that we thought would exist between England and Wales and Scotland, but which will now, apparently, be disposed of in order to satisfy the Government's desire for uniformity, notwithstanding the arrival of devolution.

Ian Davidson: Does the hon. Gentleman accept that any change is designed not to create uniformity but to improve the Scottish position?

John McWilliam: Order. Before we chase down that road, that matter can be discussed under a later clause. It would not be in order to discuss it now.

Dominic Grieve: I shall not be drawn to a detailed examination of the Scottish position. However, the intention is simply to highlight the fact that there are differences in the Bill between the regime for England and Wales and that for Scotland. Judging by the comments of the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), he seemed to be gently putting the same point that I had put earlier, which was to ask whether it will really make a difference. The Committee will recollect that when we were considering clause 6, I said that it might make a difference but probably not an enormous one. It is a safeguard provision. I preferred the Scottish approach, and in the same way, I prefer the approach of the hon. Member for Lewes and my hon. Friend the Member for Surrey Heath. It provides a measure of flexibility, whereas so much of the Bill has an inbuilt inflexibility, which is apparently designed to ensure that the Government's aims and objectives are achieved, and are not deflected by the problems of poor grocer creditors living round the corner, who have provided services to an individual whose money is to be confiscated, or, in this case, by a wishy-washy—perhaps I should use the word ``airy-fairy''—judiciary, which might get it into their heads that the assumptions that they are required to make are clearly not meeting the interests of justice in a particular case. In a nutshell, that is what this is about.

Ian Lucas: Has the hon. Gentleman considered the effect of subsection (6), which gives considerable discretion to the court?

Dominic Grieve: The hon. Gentleman makes a good point, and I accept that subsection (6) provides a let-out clause. That is as far as the Government have been willing to go.
 In response to the comment by the hon. Member for Edinburgh, North and Leith, let me say that we are not driving a coach and horses through the principle. We are asking for a small extension of the principle so that, in addition to the provision in subsection (6), the judge is allowed to exercise discretion throughout the process. It would make for better drafting, which would better meet the needs of justice. This is not an enormous issue—issues in Committees are often not—but it may have telling consequences.

Mark Lazarowicz: Does the hon. Gentleman accept the important principle of legal certainty, as well as the principle of allowing courts discretion? Does he accept that substituting assumptions with criteria could lead to different courts applying the tests in different ways? That could lead to injustice, whereas the provision for assumptions—with the qualification in subsection (6)(b), which allows the court not to make the required assumption if
``a serious risk of injustice'' 
is shown—would achieve legal certainty in a way that his formula would not.

Dominic Grieve: I accept the hon. Gentleman's point, but the risk of that happening is not significant enough to make the amendments objectionable. They may lead to a slightly greater degree of variation, but that is not something that I would necessarily worry about, as all cases turn on their own merits. I am concerned that the Bill's attempt to impose uniformity may not meet the interests of justice. Ultimately, we must consider that.
 I also accept that we must consider the desirability in terms of public policy of laying our hands on the assets of criminals—albeit not just any old assets. It is worth the Committee remembering that. Listening to the debate, I sometimes think that the measure is punitive and designed simply to remove criminals' assets. [Interruption.] The Minister shakes his head in disapproval and says, ``No, it isn't.'' I am glad to hear that. However, listening to some of the Back Bench contributions—although not that of the hon. Member for Edinburgh, North and Leith—one gets the impression that that is what the Bill is about. If it is not, we must ensure that, once a criminal lifestyle has been assumed, the system set up includes criteria that allow a greater degree of judicial flexibility than the measure provides. At the risk of repeating myself, that is especially necessary because we are widening the categories of individuals and offences that will be dealt with under the measure so much. 
 I may be wrong about that. In practice, given the discretion of the director and the prosecutor, exactly the same old category of offender may be targeted. If so, the Minister would simply have to say that the legislation had not worked, because it is clear that he wants to cast the net much wider. Those are also compelling reasons for widening some of the safeguards and judicial discretion to ensure that justice is done.

Ian Davidson: I accept that this is an important point, but I am having difficulty in grasping the circumstances in which the hon. Gentleman wants the provision to be exercised. Changing the word ``must'' to ``may'' would imply that there were circumstances in which the provision might not apply. Will he clarify the circumstances in which he would look to a judge not to proceed down the road set out in the Bill?

Dominic Grieve: I can envisage circumstances in which the judge might decide that in the interests of justice, the public need to confiscate assets should not be proceeded with. It is difficult to pick out individual instances, but let us take one possible example. Someone who has, or has had, a criminal lifestyle may, as a result, have an illness or have suffered a head injury that makes it difficult for him to rebut the assumptions.
 I believe that in those circumstances, a judge would be entitled to have the discretion at an early stage to say that justice simply cannot be done in this case. He might say that the way in which the system works, with the reversal of the burden of proof, makes it impossible for him, in the light of the evidence before him, to reach a conclusion when the defendant is at a serious disadvantage in rebutting the assumptions. This sensible measure would allow the judge to do just that.

Ian Davidson: As I understand it, that was the Saunders defence. Ernest Saunders was not proceeded against, because he was alleged to have Alzheimer's disease, but once he was released from the court, he miraculously recovered. Does the hon. Gentleman not see that we do not want a device to enable people to escape in such circumstances? The defendant would not be unrepresented he would presumably have lawyers defending him by the score, who could articulate his case on his behalf.
Mr. Grieve rose—
Mr. Mark Field rose—

John McWilliam: Order. Hon. Members must not intervene on an intervention. I call Mr. Grieve.

Dominic Grieve: The example of Mr. Saunders is an exceptionally bad one. I am sure that the hon. Member for Glasgow, Pollok would not wish to be unfair, because Mr. Saunders was subsequently completely exonerated through the appeal process.

Mark Field: Indeed. As I am sure my hon. Friend was about to continue, the Saunders case is a particularly bad example, because he was found guilty and convicted. The defence of Alzheimer's disease came later, to get him out of prison after his conviction. There was no question of its being used during the trial. As I am sure my hon. Friend will point out, there are other reasons why the Saunders case is not the best example to use.

Dominic Grieve: In response to—

Ian Lucas: May I return the hon. Gentleman to subsection (6) and the example that he gave? I suspect that that is slightly unfair of me, because he provided the example when he was on his feet, but would this not fall squarely within subsection (6)(b)? The Bill gives the court discretion to deal with the case to which my hon. Friend referred.

Dominic Grieve: It is not unfair to require me to think on my feet. That is what I have been paid to do for a number of years. If I cannot do that, I had better not come before the Committee. On the point made by the hon. Gentleman, I accept that that could happen under subsection (6). As I understand the subsection, the judge must go through the whole exercise before reaching the conclusion, rather than being able to make it at the outset, which is when one should be able to make it. That may be the full difference that lies between us, so that the issue is not as big as it appears. Nevertheless, the wording that we propose is better than the existing wording.

Paul Stinchcombe: Can the hon. Gentleman imagine any circumstance in which he would want the judge to exercise discretion other than where the assumption was incorrect, or where there was a serious risk of injustice?
Mr. Grieve rose—

George Foulkes: He is speechless.

Dominic Grieve: I am not trying to think on my feet for a moment.

John McWilliam: Order. Hon. Members must not heckle, particularly Ministers.

Dominic Grieve: I had those criteria in mind as the sort of criteria in relation to which the amendments have an advantage. I do not want to say that there are no others.

Nick Hawkins: I think that my hon. Friend would agree that one difficulty in addressing some of the concerns that are being expressed from the Government Back Benches is that we do not want to offend you, Mr. McWilliam, and stray on to the third group of amendments. However, amendment No. 76 in the third group deals with the extra provisions that we, and organisations such as Liberty, feel should be added to subsection (6). That will help us to deal with the point when we come to it.

John McWilliam: Order. Because of where the amendment is placed, it may help Members to have a clause stand part debate on it if they wish, because it covers the whole clause. I am, therefore, quite relaxed about it.

Dominic Grieve: I am grateful for that, Mr. McWilliam. The lack of a rational connection between the facts proved leading to the trigger convictions and the facts produced for consideration under the assumptions could be something else that the judge considered to be ridiculous. That is another area in which there would be a judicial safeguard. That falls within the injustice category that I described earlier, although I accept that I took the example of a defendant who was at a grave disadvantage to rebut the assumptions, for some justified and bona fide reason.
 In those circumstances, and on the basis of our amendments, it would be easier to do justice. Where is the downside? When considering such matters, one should always be minimalistic when interfering with established principles of justice. One should start to give greater powers, especially to prosecutors and directors, to reverse burdens of proof, and to bring in assumptions, only if there is some compelling necessity to do so. 
 In the comments made by the hon. Member for Edinburgh, North and Leith, there did not seem to be many downsides. I trust the judiciary to do justice in such circumstances. It is a fantasy, however, to feel that that will somehow open a door, through which a torrent of people will escape the process of confiscation. The amendments have merit on that basis alone.

Norman Baker: On a point of order, Mr. McWilliam. I should like your guidance on how we are to proceed with the amendment and the clause. In my opening remarks, I studiously stuck to amendment No. 24, as I did not wish to be ruled out of order, to the extent that I did not give as full a reply as I would have liked to an intervention by an Opposition Member on amendment No. 26. I should be happy for a safeguard to be inserted in either amendment No. 24 or amendment No. 26, but I have not yet argued the merits of amendment No. 26.
 Would it be helpful if amendments Nos. 24 and 26 were debated together, and I moved amendment No. 26 formally, or shall we first conclude our discussion on amendment No. 24, and deal with amendment No. 26 subsequently?

John McWilliam: Order. The hon. Gentleman has come to the nub of the matter. It is clear that the original grouping was too tight. I now intend to group the two sets of amendments together, so that any of them may be debated.
 With the group already under discussion it will therefore be convenient to discuss the following amendments: 
 No. 26, in page 6, line 13, leave out paragraph (a) and insert— 
`(a) The Director does not lead sufficient evidence to establish the assumption on the balance of probabilities; or 
 (aa) The defendant leads evidence to entitle the court to refuse to make the assumption; or'.
 No. 34, in page 6, line 13, leave out paragraph (a) and insert— 
`(a) the defendant adduces evidence which is sufficient to raise an issue with respect to the matter and the prosecution fails to prove its case on the matter.'.
 No. 76, in page 6, line 14, at end insert— 
`(c) there is no rational connection between the facts proved in proceedings leading to the trigger convictions and the facts adduced for consideration of the assumptions.'.
 Any hon. Member who wishes to press an amendment to the vote formally at a later stage should tell me, and he or she can do so when we reach that amendment's place in the Bill and on the amendment paper. Given the way that the debate has gone so far, it would be fairer to hon. Members and we would be better able to explore the cause if we proceeded in that way.

Norman Baker: Thank you, Mr. McWilliam. That is helpful to the Committee, because the amendments should be considered in parallel. I shall move amendment No. 26 formally, to enable us to widen the discussion.

John McWilliam: Order. Amendment No. 26 does not need to be moved, as we have grouped it with lead amendment No. 24. The hon. Gentleman may speak to it.

Norman Baker: I shall speak to amendment No. 26.

John McWilliam: And the others.

Norman Baker: And the others, but I shall pay particular attention to amendment No. 26.
 Hon. Members have suggested that the discretion that amendment No. 24 would give to the judiciary is unnecessary because of the two safeguards included in subsection 6, which states that 
``the court must not make a required assumption . . . if— 
 (a) the assumption is shown to be incorrect, or 
 (b) there would be a serious risk of injustice if the assumption were made.'' 
So far as they go, those provisions act as safeguards, but I do not think that they are sufficient. As my hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) has asked me, why is the adjective ``serious'' included in subsection (6)(b)? Does it mean that a court will not take into account a risk of injustice that is not serious but is present none the less? That is a high hurdle. Does a ``serious'' risk of injustice refer to the likelihood or the nature of the injustice?

Stephen Hesford: The hon. Gentleman and the hon. Member for Mid-Dorset and North Poole have misread the passage. The word ``serious'' does not apply to injustice; it applies to the quantifiable level of risk.

Norman Baker: That is how I read subsection (6)(b), but I think that it would be helpful to put my point on the record. Even if that interpretation is correct, a ``serious risk of injustice'' nevertheless suggests that a lesser risk of injustice is tolerable, and I think that that is questionable. The risk of injustice may be quantified according to how severe the injustice is. I accept that ``serious'' must relate to the word ``risk'', but the nature of the injustice may offset that.

Stephen Hesford: With respect, ``serious'' does not mean that the risk must be of a great injustice; the word refers only to likelihood. It has nothing to do with the level of injustice.

Norman Baker: We shall have to differ on the subject. Although I believe the hon. Gentleman's interpretation, I have given my reasons why I doubt that subsection (6)(b) will be interpreted in that way. Even though I accept his definition of the passage, a ``serious risk of injustice'' precludes a court from concluding that there is a risk of injustice that may be less serious. That is an important point.
 Subsection (6)(a) says that the assumption must not be made if 
``the assumption is shown to be incorrect''. 
That is an extremely difficult test. It may be impossible to conclude that the assumption is incorrect even if there are serious doubts about it. That is a test that requires 100 per cent. certainty. That is inappropriate, and that is why amendment No. 26 sets a different test that I hope Committee members will support. 
 The amendment has two parts. The first states: 
 ``The Director does not lead sufficient evidence to establish the assumption on the balance of probabilities''. 
The balance of probabilities is a test that Ministers have been happy to include so far in the Bill. In paragraph (a) of the amendment, we ask that the director should be able to produce sufficient evidence to establish the assumption on the balance of probabilities. That is not an especially high test, as legal tests go, and I should have thought it perfectly reasonable. 
 The second part of the amendment states: 
 ``The defendant leads evidence to entitle the court to refuse to make the assumption''. 
In other words, the person at the wrong end of the process will have the opportunity to produce evidence that leads the court to conclude that the assumption should not be made. 
 Those seem to me to be perfectly normal legal tests—and rather safer in law than the absolute wording of subsection (6)(a), which refers to when 
``the assumption is shown to be incorrect'', 
which is a 100 per cent. test, and 
``a serious risk of injustice'', 
which is close to it. 
 I hope that the Minister will not argue that the amendment would weaken the Bill. It is an attempt to get the balance right between not impeding the pursuit of justice and ensuring that proper safeguards are in place. Safeguards are an essential part of our criminal statute. I am merely trying to ensure that they are provided in the clause.

Bob Ainsworth: I shall try to help the hon. Gentleman, who is clearly worried that the thresholds for triggering the safeguards provided are too high. The safeguards in subsection (6)(a) will be decided on the balance of probabilities. That will be the test for whether the condition in subsection (6)(a) is met.

Norman Baker: I confess that my reading of the Bill had not uncovered that, which is apparently a comment on my reading of the Bill rather than on the Bill itself. I am grateful for the Minister's clarification, which eases my mind about subsection (6)(a).
 Amendments Nos. 24 and 26 are grouped. I am worried that the Government are, not only in the Bill but generally, as was evident in yesterday's consideration of the Anti-Terrorism, Crime and Security Bill, approaching the view that the judiciary cannot be trusted and needs to be put in its place, that Parliament's legislative powers are more important and that the historical balance between Parliament and the judiciary is wrong. That may be true, although I do not share that view. It is a perfectly legitimate view, and I believe that it is probably the view of the hon. Member for Glasgow, Pollok, who has been clear about his views on the judiciary. 
 I do not defend the judiciary; a lot is wrong with it, not least the background of many of those who comprise it. Nevertheless, democracy requires essential bulwarks and centres of power spread around, whether by devolution or alternative centres—between Parliament, the Executive and the judiciary. If we do not have that essential balance and one element of our constitution predominates, that is dangerous. 
 I cannot tell you, Mr. McWilliam, how the Bill might go wrong, but I know instinctively that we should not undermine one element of our constitution greatly and give excess power to another, because doing so can lead to unforeseen difficulties.

Tom Harris: Does the hon. Gentleman not understand that one reason why Labour Members are impatient with the judiciary is that even under existing legislation, the judiciary time and again refuses to make confiscation orders when it is entitled to do so? The hon. Gentleman mentions the democratic principle. Does he not accept that the democratic will of the House of Commons should take precedence over the decisions of the judiciary?

Norman Baker: The House of Commons should not take precedence over the judiciary. That would be wrong. Parliament can review the legal position and propose changes to the law if it believes that the law is impractical or ineffective. The hon. Gentleman referred to the unhappiness of Labour Members with the present judicial set up, and that hat is at the root of some of the problems that have led to the Bill and the worries of some hon. Members about the direction in which the judiciary is going.
 The judicial system is not perfect. Some people should not be in certain positions; perhaps they do not have the correct background. However, the answer is not to curtail their power and change the democratic base of the country, but to give them proper training and guidance and to deal with them in a democratic way that preserves the essential constitutional balance. I am worried that judges will be sidelined because the Government may not like what they are doing. Amendments Nos. 24 and 26 are meant to flag up issues and make sure that they are taken on board so that essential safeguards exist. 
 I was grateful for the Minister's intervention. It was extremely helpful. However, I ask him to consider the wording of subsection (6)(b) and question why it contains the word ``serious''.

John McWilliam: Order. I am anxious not to do the hon. Member for Lewes an injustice, but I wish the Committee to be clear about the grouping of the amendments. Amendment No. 25 deals with a separate point and stands on its own to be debated at a later stage.
 Secondly, I have a duty to uphold the rights of the House. I remind members of the Committee that this is the High Court of Parliament.

Nick Hawkins: Thank you, Mr. McWilliam, for your guidance. I had originally misunderstood you and thought that we were debating all the amendments, including amendment No. 25. I shall return to that amendment because Opposition Members have some important points to make about it, but for now I want to speak about amendment No. 76 because it goes some way towards dealing with one of the points that was made in an earlier intervention.
 We must remind ourselves constantly of the pre-eminent principle of the separation of powers. The courts have a role in our constitution, as does Parliament. Neither role is predominant, which is why the hon. Member for Lewes was right to respond as he did to the intervention from the hon. Member for Glasgow, Cathcart (Mr. Harris). Parliament enacts the law, but it is for the judiciary to interpret it. If Parliament decides that the judiciary has completely misunderstood its intentions, it can—because no Parliament can bind its successor—return to the issue, as we are doing now. 
 As Ministers have said repeatedly, the Bill will take the previous regime further. It would be wrong for anyone in the House to say that Parliament is always superior to the judiciary. The judiciary has a separate role in our constitutional settlement and it is important that Members of Parliament should not pretend to be in the business of telling judges what to do. We must keep that constantly in mind. 
 In amendment No. 76, we have sought to add an extra safeguard in the form of paragraph (c). We are worried that there should always be a rational connection between the facts that are proved by the trigger convictions and the result. 
 I shall refer to Liberty's helpful briefing and I explain why we share its view. Our object is to ensure that, when the assumptions apply to any property in the first place, the courts should be satisfied that there is a sufficiently rational connection between the facts proven by way of the trigger conviction and the property in question. Why is that important? If there were no rational basis to conclude that the property in question was acquired from unlawful conduct, we should not be doing what the Minister has made it clear that the Government do not wish to do, but what the hon. Member for Glasgow, Pollok may wish to do. 
 As my hon. Friend the Member for Beaconsfield pointed out, there seems to be a difference between Ministers and one or two Government Back Benchers, who seem to be saying that if somebody is a criminal we should take all of their property regardless. The Minister made it clear, in response to my hon. Friend the Member for Beaconsfield, that that was not what the Government were saying. They say that there must be some link between the seized assets and the criminal conduct concerned. That can only be safeguarded if we add paragraph (c) to clause 11(6). 
 Government Back Benchers also questioned my hon. Friend, while he was thinking on his feet, about ways in which the avoidance of injustice would not be a sufficient safeguard by itself. I was thinking—sitting down, rather than on my feet, at that stage—that another example might be helpful to Government Members. If there were a case in which some of the property that the court might think about seizing was being used for the medical care of a handicapped child of the defendant, one would not be able to argue that taking away that property would cause injustice to the defendant, but one might be able to argue that it would not be appropriate to prevent the handicapped child, who had committed no offence, from being cared for. The court might want to consider applying criteria rather than blanket assumptions from which there is no escape.

Stephen McCabe: I am interested to hear about the handicapped child. However, if the child concerned were able-bodied and happened to have expensive dancing lessons, a string of ponies, a stable, skiing holidays and a yacht in the Caribbean, would the hon. Gentleman take the same view?

Nick Hawkins: The hon. Gentleman has been helpful. When one considers amendments that move us away from blanket assumptions that the court must make and from which there is no escape to criteria, one must rely on those who make the decisions in individual court cases to use the criteria sensibly to rule out the protection of expensive dancing lessons and so on, and to use only criteria that introduce a discretion. That is what the hon. Member for Lewes and I are saying. We are worried about any question of judicial discretion being taken away completely and wholesale. It is not only the Opposition who have those concerns but Liberty, which is supported by many Government Members, including the hon. Member for Wrexham (Ian Lucas).

Ian Lucas: If I may return to the example of the handicapped child, it is perfectly clear that clause 16 refers to a serious risk of injustice, but that is not particularised to the defendant. The court would therefore have discretion to, for instance, prevent a house from being sold.

Nick Hawkins: I am not sure that that is right. The hon. Gentleman and I may take a different view of the way in which judges might interpret the matter. As my hon. Friend the Member for Beaconsfield rightly said, we can differ honestly as professionals on how we anticipate that the courts may interpret it. As a skilled and experienced lawyer, the hon. Gentleman will accept that there is a big difference between mandatory assumptions, which the Government currently propose, and giving the courts discretionary criteria, which give clear guidance, and set out, under Pepper v. Hart, how the Government intend them to be used.
 We do not want the Mr. Bigs or their associates to escape. There should be clear criteria but at least a measure of judicial discretion to enable judges to use their common sense. That is the difference between the hon. Gentleman and me. As the exceptions in clause 11(6) are currently drafted, I suspect that the courts would consider the injustice to the defendant. Everything else in the clause relates to the defendant. It would be wiser to maintain that element of judicial discretion. I am strengthened in that view by the fact that, with all-party support, an organisation such as Liberty, which the Minister knows considers these matters carefully, shares our concern. 
 The hon. Member for Wirral, West asked me whether there was any authority in English law for our concerns. There quite clearly is such authority on the point covered by amendment No. 34, and it is R v. Lambert, which is another case in the House of Lords Judicial Committee. In a moment, I shall quote from Lord Steyn, but I should first like to ensure that the Committee is clear that we are talking about amendment No. 34. Instead of the current wording we suggest inserting: 
``the defendant adduces evidence which is sufficient to raise an issue with respect to the matter and the prosecution fails to prove its case on the matter.'' 
That would impose an explanatory or evidential burden of proof on the defendant rather than a legal burden of proof. Before we are accused of trying to make things easier for the defendant, I stress that we still put the burden on the defendant. It may be pretty onerous but that is the principle that the Government are pursuing and we do not challenge it. However, if the defendant comes up with something convincing that the prosecution cannot meet, these provisions should not bite. That is surely a clear principle of English law.The ultimate burden of proof goes back to the prosecutor only after an explanation is forthcoming. When no explanation is forthcoming or the quality of the explanation given by the defendant is such as to defy belief, the assumptions or criteria will apply in favour of the prosecution. 
 In Volume 3 of the Weekly Law Reports, on page 206, Lord Steyn says: 
 ``The principle of proportionality requires the House to consider whether there was a pressing necessity to impose a legal rather than evidential burden on the accused. The effect of section 28 is that in a prosecution for possession of controlled drugs with intent to supply, although the prosecution must establish that prohibited drugs were in the possession of the defendant, and that he or she knew that the package contained something, the accused must prove on a balance of probabilities that he did not know that the package contained controlled drugs. If the jury is in doubt on this issue, they must convict him. This may occur when an accused adduces sufficient evidence to raise a doubt about his guilt but the jury is not convinced on a balance or probabilities that his account is true. Indeed it obliges the court to convict if the version of the accused is as likely to be true as not. This is a far-reaching consequence: a guilty verdict may be returned in respect of an offence punishable by life imprisonment even though the jury may consider that it is reasonably possible that the accused had been duped. It would be unprincipled to brush aside such possibilities as unlikely to happen in practice. Moreover, as Justice has pointed out in its valuable intervention, there may be real difficulties in determining the real facts upon which the sentencer must act in such cases. In any event, the burden of showing that only a reverse legal burden can overcome the difficulties of the prosecution in drugs cases is a heavy one.'' 
I shall quote at no more length from the judgment, although Liberty sent us a longer passage. 
 I must be careful not to offend the sub judice rules. Liberty referred us to a further case that has gone on appeal to the House of Lords, which is R v. Benjafield; R v. Rezvi. Although the House of Lords has heard the case, a verdict has not been delivered. The Minister may tell me otherwise but I have not seen a verdict. Section 4 of the Drug Trafficking Act 1994, the provisions of which the Government wish to use the Bill to extend, and section 72 of the Criminal Justice Act 1988 are the subject of the further appeal. Therefore, we cannot discuss that matter, although the House of Lords may give a judgment before the end of the Committee stage, which would provide further guidance. However, the Government would be wise to keep an open mind on the matter while a case concerning evidential burden on the defence is pending before the House of Lords, which the superior court of the land.

Tom Harris: The hon. Gentleman started his contribution by suggesting that he was keeping to the spirit of the Bill because the amendment would mean that the onus would still be on the defendant to establish proof. His explanation does not stand up to that. He suggests that as soon as the defendant comes up with new evidence, the onus is on the prosecuting authorities.

Nick Hawkins: Liberty makes it clear that the ultimate burden of proof will remain with the defendant because he must start the process by producing convincing facts. Therefore, there will be an evidential burden on the defence. However, if the defendant comes up with compelling facts to which the prosecution must respond, that is a sensible safeguard in English law. There should not be a situation in which the defendant produces convincing facts and, although the prosecution says nothing, the defendant still loses. That is an essential safeguard.
 I have said all that I need to say about the widened group of amendments. I will be interested to hear the Minister's comments, because I noticed that he nodded when I referred to the case that is sub judice.

Bob Ainsworth: I shall try to deal with both sets of amendments and to be objective in my response to the hon. Member for Lewes, although the hon. Member for Surrey Heath made similar comments. I shall try not to characterise the amendments as simply weakening the Bill, although since that is what they would do, I have a duty to point it out.
 Amendments Nos. 24 and 51 to 59 would have a twofold effect. Amendment No. 24 would make assumptions discretionary. The remaining amendments in the original group would change the wording of the Bill to include the word ``criterion''. The amendments would give the court calculating a lifestyle criminal's benefit the discretion to have regard to certain criteria. The Government believe firmly that mandatory assumptions are a key element in the process of recovering the proceeds of crime from those offenders who have a criminal lifestyle. 
 We are opposed to the amendments for several reasons. I refer first to amendment No. 24, in isolation from the others. History teaches us that discretionary assumptions are ineffective. The Conservative Government changed discretionary assumptions to mandatory assumptions in certain instances. Opposition Members asked whether the Scottish system was more acceptable because it was discretionary and said that the English and Welsh system was less effective because it was mandatory. There are about 1,200 confiscations a year in the English and Welsh jurisdictions. About 1,000 concern drugs and are mandatory. Only 200 are for other categories of crime, which are discretionary. That points to the fact that mandatory arrangements are being used more widely. They are certainly more effective at the moment in confiscating the proceeds of crime.

Norman Baker: That is an interesting point. The statistics to which the Minister referred are worrying. I should be interested to know whether the Government attempted to deal with that position before the Bill was introduced. Has guidance been issued, for example, to show the importance of existing assumptions? In that case, why have there not been more instances of assumptions being applied?

Bob Ainsworth: The hon. Gentleman, who said that we should be mindful that we do not overrule the courts and rescind the paramountcy of Parliament, now suggests that we can solve such problems by giving guidance to the courts. We have all the Hansard reports on all the Acts concerning the proceeds of crime going back to 1986. When I read those reports, the really worrying aspect was that they all said the same thing, and they go back a generation. We have failed repeatedly to put an effective system into place to confiscate the proceeds of crime.
 Various Under-Secretaries at the Home Department have told us how a particular refinement will make the difference and how that will suddenly be seen on the streets of our constituencies. We have been told how they will tackle crime and bring us back to the point where crime does not pay, yet Parliament has failed to do so. After all my years in the Whips office, I still have enough idealism to believe that we were elected to this place to make a difference. I want us to put us above point scoring. I accept that debating small points is what discussing a Bill in Committee is all about, but we must keep our eye on the big picture. Unless we make a step change in the way in which such legislation is drafted, we shall not make a difference. When we are in our dotage, another Under-Secretary of State at the Home Office will be saying on the radio that he now has the solution to the problem.

Nick Hawkins: I am certainly trying to keep my eye on the big picture. Before giving way to the hon. Member for Lewes, the Minister came up with statistics that cannot be allowed to pass without challenge. Without knowing how many different cases were brought forward and how many applications were made under the current provisions, we cannot—on the basis of 1,200 confiscations, of which 1,000 were of one type of case and 200 of another type—draw conclusions about the merits or otherwise of discretionary or mandatory systems. One often hears people say in this place that there are lies, damned lies and statistics, but the Minister knows perfectly well that one cannot extrapolate the conclusions that he has drawn on the basis of raw statistics. It is a false premise.

Bob Ainsworth: The hon. Gentleman claims to have read some of the old Hansard reports and a speech by the now Lord Corbett. From my speed reading, I am not sure about that or about whether Lord Corbett made the points that the hon. Gentleman claims. None the less, the hon. Gentleman will know that previous Conservative Governments changed the legislation from discretionary to mandatory because the powers were not being used. I remind the Committee that the assumptions in the Drug Trafficking Offences Act 1986 were discretionary. The Government of the day found it necessary to replace them with mandatory assumptions because discretionary assumptions were not being used by the courts.
 Amendment No. 24 would make assumptions discretionary. I will not say that it would weaken the Bill, since that would offend the hon. Member for Lewes, but it would return us to a situation that was deemed to be wholly unsatisfactory. The discretionary regime would allow the courts to disregard assumptions for any reason, including the general aversion to the process of particular judges, or for no reason at all. That is not acceptable. With many criminal lifestyle offenders, we are dealing with the top bracket of serious and organised crime. Moreover, there must be some consistency in the handling of criminal lifestyle cases across the jurisdiction. 
 Part 2 is in many respects a consolidation measure. In England and Wales, we have a drug trafficking regime with mandatory assumptions and a non-drug regime with discretionary assumptions. The hon. Member for Surrey Heath said that we are making mandatory assumptions for offences other than just drug trafficking. That is right. The hon. Member for Beaconsfield said that if the legislation is not used far more widely, it will be seen as a failure. I have made it clear that the measure of success will be when we are effectively confiscating the proceeds of crime. We should be examining effectiveness rather than width. 
 Hon Members repeatedly propose amendments that would have beneficial effects in some circumstances but would allow people great loopholes through which they would inevitably and rapidly climb. That would render the legislation much less effective. Our task is to draw together the two strands into a single regime that is either mandatory or discretionary. Given the historic lessons, we have decided in favour of a scheme that is mandatory throughout. 
 We have introduced a further safeguard to allow for the fact that assumptions are now mandatory in non-drug cases. The trigger offences have been raised from two qualifying offences in the current proceedings to four, or one in the current proceedings plus two others in separate trials in the past six years instead of just one other. There is also the general safeguard that the court must not make an assumption if there is a serious risk of injustice. I intervened on the hon. Member for Lewes to try to reassure him, because he thought that that hurdle was far too high. The assumption in clause 11(6)(a) can be shown by the defendant to be incorrect on the balance of probabilities. That measure will apply to the defendants' need to show that the assumption is incorrect. 
 The hon. Member for Surrey Heath quoted extensively from case law that goes back to 1983. I am beginning to get the measure of the hon. Gentleman; he goes back to 1983 to quote Lord Woolf's comments on an American case—

Nick Hawkins: On a point of order, Mr. McWilliam. The Minister may have misheard me or I may have used the wrong date. Whichever it was, the case from which I quoted Lord Woolf was in 1993, not 1983.

John McWilliam: Order. That is not a point of order.

Bob Ainsworth: I apologise. I think that the hon. Gentleman said 1983, but if he meant 1993, all well and good. None the less, it was some time ago, and Lord Woolf was referring to a case in American jurisdiction. The hon. Gentleman also quoted a case in Hong Kong jurisdiction, and told us that the principles were exactly the same because it was under the UK criminal justice system. In discussing the second set of amendments, he then quoted the Lambert case. He said that the principles were exactly the same, but he did not tell us that the Lambert case had nothing to do with confiscation. If the hon. Gentleman's research into case law was so extensive, why on earth did he not quote recent case law on assumptions in cases of confiscation? There is plenty of it. Why did he have to cite Hong Kong, America, and Lord Woolf from 1993? Why did he not quote Lord Woolf on Benjafield?

Nick Hawkins: The Minister needs to be very careful. I believe that the Benjafield case, which was dealt with by Lord Woolf as Master of the Rolls, is on further appeal in the House of Lords and has yet to be decided. Lord Woolf is no longer a law lord: he is now presiding judge in the Court of Appeal. The Minister will doubtless clarify the position in a moment.
 The two cases that I quoted, both of which, as I made clear, involved legal principles that are applicable today, were supplied to us by Liberty, a reputable organisation that is supported by all parties. Both cases referred to the law relating to evidential burdens, which is what we are talking about in this context.

Bob Ainsworth: Those evidential burdens have nothing to do with confiscation. The hon. Gentleman could have cited recent case law dealing with confiscation, but he chose not to do so.
 On proportionality and the question of whether the hurdle was too high, which was raised by the hon. Member for Lewes, the Court of Appeal said of the Benjafield case that serious risk of injustice enabled the court to take full account of the requirement for proportionality under the European convention on human rights. That related to assumptions made under previous legislation, so the Benjafield case dealt with the precise issue that we are discussing. According to the ruling, the safeguard in this Bill, which is exactly the same as that in existing legislation, meets the ECHR requirement for proportionality.

Norman Baker: I am grateful to the Minister, whose reply was very helpful. I wanted to question the use of the word ``serious'' but I think that he has dealt with that issue.

Bob Ainsworth: By replacing the word ``assumption'' with the word ``criterion'', amendments Nos. 51 to 59 would, in effect, abolish the assumptions procedure altogether. Instead, the court would have the discretion to regard the holding, receipt or expenditure of property by the defendant as a criterion by which to calculate benefit.
 The hon. Gentleman knows that the assumptions impose, and are intended to impose, a reverse burden of proof so far as specific property that is shown to have been in the defendant's possession is concerned. As I have said, they start from the basis that a lifestyle criminal's property constitutes the proceeds of crime unless the offender proves the contrary on the balance of probabilities. Let us not run away from that; it is what we are suggesting, and I do not want anyone to be under any illusions. When someone has been convicted in terms that identify him as a lifestyle criminal, the burden of proof reverses and it is up to the person to show, on the balance of probabilities, that his assets are not the proceeds of crime. Opposition Members keep on, for whatever reason, trying to weaken that, and put the burden back in some cases—we shall discuss that when we come to the second set of amendments—on to the prosecutor.

Boris Johnson: Surely the point is not whether he is a lifestyle criminal, but whether he has a criminal lifestyle. I am not aware of the phrase ``lifestyle criminal''. The Minister seems to be changing the formulation to suit his case. To be accused of being a lifestyle criminal is very different from being accused of having a criminal lifestyle.

Bob Ainsworth: Good gracious me, we are getting tangled up with the wordsmith of The Spectator, a very dangerous road down which to travel. I assure the hon. Gentleman that I am not trying to change meaning. When someone is shown, on the assumptions and criteria in the Bill, to be a lifestyle criminal and to have a criminal lifestyle, then, yes, we reverse the burden and it is for them to show that their assets, gains and moneys spent over a period of time were not the proceeds of crime.

Boris Johnson: I would like to be absolutely clear. Is the Minister taking the two terms—lifestyle criminal and having a criminal lifestyle—to be coincidental, synonymous and mutually substitutable?

Bob Ainsworth: I shall try to think on my feet, as the hon. Member for Beaconsfield showed such ability in doing. I do not necessarily see a huge difference between the two terms, and I am at the moment using them like that, turning the words round the other way. If the hon. Member for Henley (Mr. Johnson) can show me a substantive difference, I will happily refrain from doing so and instead use one order of the words rather than the other on each and every occasion.

Boris Johnson: I thought that we had established the other day that there was a clear semantic difference between being a criminal and having a criminal lifestyle. The Minister says that people who are lifestyle criminals should have their assets expropriated on the balance of probabilities. That is different from saying that that should happen to someone who has a criminal lifestyle.

John McWilliam: Order. We are getting into semantics, but we must take matters in context their and in the context of the Bill, that does not really make any difference.

Bob Ainsworth: There was a lot of confusion the other day about whether the phrase referred to style of dress. We accepted that a better phraseology could be found, and Committee members were challenged with coming up with one, and we will try to do that. That is what I thought that we had established the other day.
 In practical terms, the assumptions are an essential means of identifying the value of a criminal's benefits from crime. Only the criminal knows the true origin of his or her property, so it is vital that the criminal should have to account for the legitimacy of those assets. Given the difficulty in most cases of establishing a paper-trail link from the property now held by the criminal to the underlying criminality, it is unrealistic to expect the authorities to prove the criminal origin of the property owned by the defendant. 
 The hon. Member for Surrey Heath said that either I or my hon. Friend the Minister of State—I do not know which of us he was referring to—had said that there needed to be a linkage between the property and the crime concerned. I cannot recall ever saying that about criminal lifestyle cases. That is absolutely not so—it is exactly what we are trying to avoid, because it is almost impossible to prove. 
 I contend that amendments Nos. 24 and 51 to 59 would render the legislation ineffective, leaving the proceeds of crime in the hands of lifestyle criminals—or people with criminal lifestyles, if the hon. Member for Henley prefers that turn of phrase. The Government are opposed to those amendments, and I hope that they will not be pressed to a vote. 
 The first limb of amendment No. 26 would require the director to lead evidence as to the validity of a particular assumption before the assumption is made. The second limb would permit the court to refuse to make the assumptions when the defendant leads evidence that entitles it to do so. 
 Amendment No. 34 is more straightforward. It would replace the persuasive burden applicable to the confiscation proceedings with an evidential burden. 
 Amendment No. 76 is a variation on amendment No. 24. It would require the court not to make the assumptions if ``the facts adduced''—to quote from the amendment—for the consideration of the assumptions were not rationally connected with the facts leading to the triggering conviction. 
 As currently drafted, the Bill states that the defendant must show that the assumption is incorrect if it is not to be made, or there must be a serious risk of injustice if the assumption is made. If the defendant fails to prove that the assumption is incorrect, the court will make the assumption. The defendant will need to show that the assumption is wrong that a particular property was obtained as a result of criminal conduct. That is what the Government intend the legislation to do in cases that involve lifestyle criminals.

Ian Davidson: What will happen in circumstances in which assets are held in joint names—for example, a home that is owned jointly by a criminal and his or her spouse, or a joint bank account? Will the Minister clarify that now, or on the next occasion when the Committee meets?

Bob Ainsworth: I hope that my hon. Friend will forgive me, but if I go down that road, a lengthy explanation will need to be given. I will address his point at a later stage of the scrutiny of the Bill. The Bill clearly show how the separation of associated property is to be achieved to ensure that innocent people's property that is tied up with the proceeds of crime is not confiscated, while the proceeds of crime and tainted gifts are confiscated, and while huge loopholes that criminals can use are not provided.
 I return to amendments Nos. 26, 34 and 76. Their effects would not be quite the same. The reason for having an assumptions procedure is that criminals are adept at concealing paper trails between their offending and their property. In many cases, that makes it impossible for the director or the prosecutor to lead any evidence as to the criminal origins of the defendant's property. That is why an assumptions procedure is contained in the Bill. If the first limb of amendment No. 26 were accepted, it would mean that, for example, the director would not only have to prove that a particular item of expenditure was made by the defendant but to produce evidence that that expenditure was the proceeds of crime, and only when that evidence had been led would the assumption apply. 
 By that time, the assumption would be meaningless, as the whole point of the assumption is to make it unnecessary for the director to prove a link between the expenditure and a particular crime. On amendment No. 34, it is not entirely clear what sort of procedure is envisaged. Amendment No. 26 would delete subsection (6)(a). We can assume that the intention is that the defendant would not be required to disprove an assumption on the balance of probabilities. Rather, it would be possible for the court to refuse to make an assumption if evidence was brought that fell short of rebutting the assumption. If that is the case, the amendment would severely undermine the assumptions procedure. Once again, the proceeds would remain in the hands of the criminals. 
 Amendment No. 34 would put an evidential rather than persuasive burden of proof on the defendant in the assumptions procedure. The Government think that the persuasive burden is fully justified in that situation. If an evidential burden of proof were applied in confiscation proceedings, and the defendant led some evidence that contradicted the assumption, the burden would fall back on the prosecutor to prove on the balance of probabilities the matter to which the assumption related. For example, if the director or prosecutor pointed out that an unexplained transaction for £10,000 was in the defendant's bank account and the defendant produced evidence that he was a gambler, the onus would be on the director or the prosecutor to prove the origins of the money. 
 As I have previously explained, we are dealing with criminals who conceal any paper trail between their offending and their property. In many cases, there may have been no paper trail in the first place. It is simply not feasible to place that burden on the director or prosecutor.

Dominic Grieve: Does the Minister think that it is wrong in principle that if someone can advance a prima facie rebuttal of the assumption, it should not be for the director or prosecutor to show on the balance of probabilities that the rebuttal is not valid and to establish his case?

Bob Ainsworth: No, I do not accept that. We are dealing with people who have been convicted of a criminal offence and who have a pattern of offences that display a criminal lifestyle, and we are giving them the opportunity, on the balance of probabilities, to prove that their property or their expenditure was not the proceeds of crime. The hon. Gentleman is simply expecting us to allow them merely to present evidence that the property might not be the proceeds of crime, and to reverse the whole burden on to the prosecutor to prove that the property is the proceeds of crime.
 I suggest to the hon. Gentleman that that will not be possible in the overwhelming majority of cases. This is the hon. Gentleman who said that he would rejoice if he saw the legislation bringing in large sums of money. If it is his intention to make sure that those large sums do not come in, he should urge me to accept that we reverse the whole burden of proof and lose the possibility of confiscating the proceeds of crime, even in cases in which evidence presented is well below the balance of probabilities that he said was a low threshold.

Norman Baker: I do not seek to undermine the Bill in the way in which the Minister paints. However, I introduced paragraph (aa) into amendment No. 26, which states:
 ``The defendant leads evidence to entitle the court to refuse to make the assumption; or''. 
That is not the same as saying, ``I am a gambler, so it is up to you to do something about it.'' If the defendant can show, to use my example, that a payment of £10,000 into his bank account coincided exactly with a national lottery win, would that not be evidence, on the balance of probabilities, that that £10,000 was not the proceeds of crime and therefore not confiscatable? Surely that is already covered in the Bill. On the balance of probabilities, the defendant would show that the £10,000 was not the proceeds of crime, and the court would be under an instruction not to confiscate that money. The amendment could lead to a lesser burden of proof. The person would simply have to present evidence that it may not be the proceeds of crime, which is different from what he was saying.

Norman Baker: I was grateful for the Minister's earlier clarification in relation to subsection (6)(a), and I am happy to accept that the balance of probabilities test is in place. That makes my mind much calmer than it was when the amendment was tabled. However, I dispute that the words in the second part of amendment No. 26 have the construction that he seeks to apply to them.

Bob Ainsworth: I am advised that they have that construction, and that if the amendment were accepted—I am not trying to play party politics—a much lower level of evidence would be required. Simply presenting evidence would lead to a double reversal on the prosecution who would have to prove the origins of the property in question. Before the hon. Gentleman decides whether to press the amendment to a vote, I ask him to consider it seriously that in the overwhelming majority of cases that would not be provable, and the proceeds of crime would not be confiscated. That is the advice that I have received about how the amendment would impact on the Bill. The application of an evidential burden would make the assumptions procedure ineffective.
 In relation to amendment No. 76, the facts adduced for the consideration of assumptions are the details of the property held, received or spent by the defendant, as set out by the director in the prosecutor's statement. The process begins with a description of the defendant's property, and the defendant must then account for its lawful origin. As I explained, the procedure is designed to absolve the director and the prosecutor of the need to lead evidence as to the criminal origin of the property, and nor should any such requirement be imposed on them. 
 The amendment is flawed in another respect—it implies that there must be some connection between the offences on the charge sheet and the conduct the proceeds of which the assumptions are designed to expose. If, for example, a defendant had been convicted of fraud, the assumptions could not be made if no link was proved between the defendant's property and fraud. That approach is misguided. The purpose of the assumptions is to lay bare the proceeds of the defendant's entire past criminal career, regardless of the conduct involved.

Dominic Grieve: I apologise for not being present for the start of the Minister's speech. My various jobs led me out of the Room, then back in. That will cease at the end of this week.
 The Minister's argument fills me with gloom. He has so neatly encapsulated the potential central flaw in this legislation: the complete lack of connection between the wonderful nebulous concept of ``general criminal conduct'' and the offences. He glories in it. It is a confiscatory mechanism designed to be targeted against people when the state has decided that it does not like the cut of their jib. Is that not why the safeguards that he wishes to dismiss out of hand are needed?

Bob Ainsworth: If a repeat offender is deemed to have a criminal lifestyle under the assumptions procedure, amendment No. 76 invites us to prove that his property and assets are the proceeds of a specific crime. I do not know how the hon. Gentleman squares that with his desire to rejoice in the confiscation of the proceeds of crime. In current case law under European procedures, defences have been based on the notion that assets are not the proceeds of a drug-related crime.
 When the assumptions apply, the burden of proof is reversed and I do not glory or revel in that. I want legislation that will confiscate the proceeds of crime from those with criminal lifestyles and will render their activities non-profitable, in many cases bringing them to an end. That is not revelling.

Dominic Grieve: The Minister refers to the proceeds of crime. I am not arguing against the Bill, but to get him off the high ground. The process will not confiscate the proceeds of crime: it will confiscate assets not linked with any particular offence that the defendant cannot prove to be legitimately obtained, which is what the procedure is designed to do. It is important to call a spade a spade. Only when we do so can we logically build the safeguards that justice requires.

Bob Ainsworth: The safeguards in subsection (6) are appropriate and will prevent the confiscation of property that does not proceed from crime. They are designed to do so in a limited way, which does not allow people to hide the proceeds of crime. The hon. Gentleman has huge misgivings about that, which he has made plain. Without the Bill's assumptions, we will not have an effective confiscation procedure in cases of lifestyle criminals. The safeguards in subsection (6)(a) are adequate because they instruct the court not to make assumptions if a serious injustice will occur, and not to confiscate property if assumptions are shown to be incorrect. We will have to differ on that.

Ian Davidson: Is this not another example of the Conservatives demonstrating that they are soft on drugs and drug suppliers? Given the assumptions about ``the relevant day'' in subsection (2)(a), and the ``period of six years'' in subsection (8), will the Minister clarify that he wants to attack the assets acquired throughout the entire criminal career of a particular individual? Can he guarantee that the assets acquisition process can be examined, or has to be defended, back beyond six years?

John McWilliam: Order. The hon. Gentleman is referring to something that we have not reached yet. We are discussing an earlier amendment.

Bob Ainsworth: I think that I could satisfy my hon. Friend on that point. If you allowed me to, Mr. McWilliam, I might be able to do exactly that under clause stand part or another amendment.
 I come to the conclusion, much though the hon. Member for Lewes may regret it, that all the amendments would seriously weaken the Bill's provisions and prevent the confiscation of the proceeds of crime. They would create unreasonable hurdles for the director and, in some cases, an unreasonably low level of evidence to reverse the burden of proof and put it back on the prosecutor. I ask members of the Committee not to support the amendments unless they want exactly that to occur.

John McWilliam: Before the debate is adjourned, it may be convenient for the Committee if, as a consequence of regrouping the amendments, I rule that there will be a Division—or not, as the case may be—first on amendment No. 24. There is a case for a separate vote on amendments Nos. 26, 34 and 76. If hon. Members choose to have such a vote, it will take place after the debate on amendment No. 25.
 Debate adjourned.—[Mrs. McGuire.] 
Adjourned accordingly at twenty-six minutes past Seven o'clock till Thursday 22 November at five minutes to Nine o'clock.